Fund Commentary (May 2014)

adaws eagle fund commentaryLast month's gains were negated due to May's disappointing "paper" loss of -12.95%.

What's interesting though is, the losses this month were only a paper loss, and due to the overbought nature of the S&P500, we are looking for a pull back to benefit our open positions.

All positions closed in May resulted in a profit.

May Trades

  • One June position rolled to July for a 15.9% profit to reduce risk.
  • Three new positions opened, and still open.
  • Two May positions closed prior to expiration for a 14.8% and 7.3% profit.

We are happy with the realized profits this month, though unfortunately the paper losses have dragged on our performance. Likely June's performance will negate all of this paper loss.

Market Update

The market's relentless push higher is definitely running out of steam. Investors Intelligence Advisors' Survey shows that investors optimism is at the second highest point in 27 years. The majority of investors are jumping long into the market without caution, and this is going to hurt them more than just a nip in the butt later on.

The economy is wobblying, yet markets are booming creating the ideal bubble just waiting to pop.

The Volatility Index (VIX) has been low for two full years. The VIX is a sentiment measure, and currently shows continued complacency amongst investors, which is usually a sign of exhausted rallies and market tops.

If you would like to discuss this month's performance, then feel free to drop us a line.

Happy investing, and talk to you again next month.

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